April 08, 2014
Mumbai
CRISIL assigns ‘CRISIL AAA (SO)’ on PTCs issued by HDFC Trust 2014

Details Yield Terms Issue Size (Rs. Million) Tenure (Months) # Rating Credit-cum-liquidity Enhancement (Rs. Million) *
Series A PTCs Floating$ 5,439.0 356 CRISIL AAA (SO) 326.3

#Indicates door-to-door tenure. Actual tenure will depend on the level of prepayments in the pool, and exercise of the clean-up call option.
^Additionally scheduled excess interest spread (EIS) amounting to Rs.1,221.3 million (assuming zero prepayments) also provides credit support to PTCs
$The investor yield is linked to its base rate

CRISIL has assigned its ‘CRISIL AAA (SO)’ rating to the pass-through-certificates (PTCs) issued by HDFC Trust 2014. The PTCs are backed by home loan receivables originated by HDFC Ltd (HDFC; rated ‘CRISIL AAA/FAAA/Stable/ CRISIL A1+’).

The rating is based on the credit quality of the pool cash flows, HDFC’s origination and servicing capabilities, the transaction’s credit enhancement and payment mechanism, and the soundness of the transaction’s legal structure.

The receivables arise from a pool of home loan contracts originated by HDFC. The transaction has a ‘par’ structure. HDFC will assign the pool to HDFC Trust 2014, managed by IDBI Trusteeship Services Ltd, which will issue PTCs to investors.

About the Pool
The pool comprises home loans; at least 16 monthly instalments have been paid for each of the loans. The seasoning of the pool is high, with a weighted average net seasoning of 41.5 months. The pool is geographically diversified, with the top three states in the pool together constituting 63.3 per cent of its principal. As on the pool cut-off date, 94.5 per cent of the principal is from contracts which are current on payments. The average loan-to-value of the contracts is 77.8 per cent with an average ticket size of Rs.1.17 million and average current interest rate of 11.0 per cent.

Rated Pools
CRISIL has outstanding credit opinions/ ratings on five assignment/ securitisation transactions backed by home loan receivables originated by HDFC as on date. The performance of all the pools is in line with CRISIL’s expectations.

About the Originator
HDFC (rated ‘CRISIL AAA/FAAA/Stable/CRISIL A1+’), a housing finance company, was incorporated in 1977; its initial shareholders included the International Finance Corporation, Washington, and the Aga Khan Trust. As on December 31, 2013, HDFC's loan book stood at Rs.1922.7 billion, of which 70 per cent consisted of loans to individuals, while the remainder comprised loans to corporate entities, rental discounting, and construction finance.

For 2012-13 (refers to financial year, April 1 to March 31), HDFC reported a profit after tax (PAT) of Rs.48.5 billion (Rs.41.2 billion for the previous year) on income from operations (net of interest expense) of Rs.72.6 billion (Rs.62.0 billion). For the nine months ended December 31, 2013, HDFC reported a PAT of Rs.37.2 billion (Rs.32.9 billion for the corresponding period the previous year) on income from operations (net of interest expense) of Rs.50.5 billion (Rs.43.9 billion).

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Last updated: May, 2013

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April 07, 2014

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